The jury is still out on who really won the first US presidential debate, but the US bond market seems to have an idea. Some reports suggest investors may be positioning themselves for a steepening of the treasury yield curve, in which long-end rates rise faster than the short end. In fact, a 'blue sweep' -- a Democrat takeover of the White House and both chambers of Congress – is becoming a consensus trade as the notion of an unassailable lead for Joe Biden is beginning to take hold in financial markets. Another school of thought, though, says a Democratic win may raise concerns about their tax agenda, which may weigh on risky assets and drive treasury yields lower on safe-haven flows.
MARKET CUES: Where do we stand >>>  | Nifty futures on the Singapore Exchange traded 115 points up at 7 am (IST), indicating a strong start for Dalal Street. |
| On Wednesday, Nifty50 ended flat for the second straight session. The index witnessed selling pressure near 11,300 level, as it formed a day's low near 11,180, reflecting indecisiveness among investors. |
| Stock trading in Asia got off to a slow start after the biggest exchange outage in a decade halted most equity trading in Japan and holidays shut a number of markets. Shares rose about 1.5% in Australia and Singapore. China, Hong Kong, Taiwan and South Korea are shut. |
| The US equity indices pared much of their gains overnight after Treasury Secretary Steven Mnuchin said there had been no agreement on pandemic relief. Yet, Dow ended up 329 points, or 1.2%; the S&P500 rose 27.53 points, or 0.83%, and the Nasdaq 82.26 points, or 0.74%. |
| Oil prices were little changed in early Thursday. WTI crude futures slipped 1 cent to $40.21 a barrel while Brent futures rose 3 cents to $42.33 |
| Snapping a two-session losing streak, the rupee strengthened by 10 paise to close at 73.76 against the US dollar on Wednesday, supported by macroeconomic data and positive domestic equities. |
| The dollar was on the defensive at a one-week low. The New Zealand dollar extended gains to a one-week peak; the Aussie dollar rose 0.1%; the yuan edged up to a week-high & the yen was firm indicating plenty of underlying caution. The euro edged held Wednesday's gains as did the pound |
| Gold prices climbed to Rs 53,670 per 10 gm, while silver ruled at Rs 61,000 a kg. On the MCX, October gold futures fell 0.55 per cent to Rs 50,404, while silver December futures traded at Rs 59,919. In global markets, the yellow metal rose 0.1% to $1,887.05 an ounce. |
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D-Street has a history of gaining post US polls... Indian stock indices are likely to rise further irrespective of the outcome of the US Presidential election in November if historical data is anything to go by. Data show the Sensex gained 3-14% during the six months after the US election outcomes in four out of last five occasions. What could go against the past trend this time is that the market has already risen 50% in last six months while economic uncertainties on account of the coronavirus pandemic remain.
Read More RIL sells more stakes in retail arm… Reliance Industries on Wednesday announced two more investments from US funds totalling Rs 5,500 crore in Reliance Retail Ventures, the holding company of India's largest retailer. Private equity firm General Atlantic (GA) will invest Rs 3,675 crore to acquire a 0.84% stake in Reliance Retail, while Silver Lake will add Rs 1,875 crore to the Rs 7,500 crore investment it had announced on September 9, which will take its total holding to 2.13% from 1.75%.
Read More Banks go in for big credit push... Banks are putting in their best efforts — offering fee discounts, lower interest rates and a promise of quick loan processing — to revive credit growth, which is languishing at multi-decade lows because of the pandemic. Large lenders such as the State Bank of India, HDFC Bank and ICICI Bank have unveiled a host of special offers to take advantage of pent-up consumer demand during the festive season as they hope higher demand will make up for the lost first quarter.
Read More Global PEs line up for commercial realty… Global PE firms with deep pockets and strong local market understanding are actively scouting for commercial assets at attractive valuations as debt-laden builders are scurrying to reduce debt in a cash-constrained environment. Institutional investors such as the Blackstone Group, APG Asset Management and CapitaLand Group continue to bet on opportunities in India owing to factors including growing urbanisation, consistent policy reforms and attractive assets amid the pandemic.
Read More Cinemas, multiplexes to open on Oct 15… Cinema halls, multiplexes and theatres will be allowed to open with 50% capacity in 'Unlock 5' guidelines announced on Wednesday. States will be allowed to reopen schools after October 15 too, despite a steep rise in the number of Covid-19 cases. Ahead of the festival season, the Centre has also allowed maximum 200 persons to gather indoors after October 15, with a 50% of capacity rider. States have the freedom to decide the number of people who can assemble for social, religious and political gatherings, but it should follow the 50% space capacity rule.
Read MOre Airtel fall overdone, reversal on the cards... Two leading brokerages said the 20 per cent decline in shares of Bharti Airtel in the last one month is overdone. CLSA and UBS maintained buy on the stock on Wednesday, with their price targets projecting as much as a 70 per cent upside. The stock ended down 3.3 per cent at Rs 420.9 on Wednesday.
Read More Interest rates on small savings unchanged… Interest rates on small savings schemes such as the Public Provident Fund and National Savings Certificate will remain unchanged for the third fiscal quarter beginning Thursday, economic affairs secretary Tarun Bajaj said. The government had lowered the interest rates applicable for the first quarter, and has since left them unchanged at those levels. Interest rates on small savings schemes are reviewed and applied every quarter, based on the yields of government securities.
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Govt borrowing target unchanged… The government kept its gross borrowing target for FY21 unchanged at Rs 12 lakh crore, counting on a pick-up in tax revenues to meet any need for a stimulus to support the economy. In the second half of the fiscal, the Centre will borrow Rs 4.34 lakh crore, the balance left over from the revised Rs 12 lakh crore gross market borrowing announced in May. The government had budgeted gross Rs 7.8 lakh crore market borrowing in the February budget for FY21 but was forced to raise it by over 50% later.
Read More Govt panel to screen Chinese FDI… India has set up a screening panel to vet all Chinese foreign investment proposals and those considered "non-controversial" could be approved, a senior government official told ET. More than 100 proposals involving foreign direct investment (FDI) from China are pending. Prior government clearance was made mandatory for FDI from countries sharing a land border in April.
Read More Core infra sectors shrink…. India's core infrastructure sector shrank for the sixth straight month in August with slightly bigger contraction than the month before, confirming flattening of recovery in the month. According to data released on Wednesday, output of eight core infrastructure sectors – coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity – dropped 8.5% in August compared to 8% contraction in July. The July number has been revised upward from 9.6% contraction estimated earlier.
Read MOre Overall loan rejig pegged at 5-10%…. Credit-rating company ICRA has estimated that the overall restructuring volumes for non-banks could be 5-10% and 5-8% for banks. A majority of fresh slippages in India's lending industry would be from special mention account loans that are overdue beyond 30 days as of March and do not have restructuring windows open for them.
Read MOre Meanwhile... Record current account balance surplus... India's current account balance, the value of exports and imports of both goods and services, ended in a record surplus of $19.8 billion, or 3.9% of GDP, during the quarter ended June, exceeding the expectations of economists, as merchandise trade contracted with a slump in crude oil consumption due to the lockdown, and income from services stayed stable. The surplus compares with a deficit of $15 billion, or 2.1% of GDP, a year earlier, RBI data showed.
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